<http://business.guardian.co.uk/economy/story/0,,2192783,00.html>
Foreign direct investment rises but poor may not be benefiting
Ashley Seager Wednesday October 17, 2007 The Guardian
The continued strength of the world economy and high commodity prices caused another surge in foreign direct investment last year but it is not clear whether the benefits are trickling down to ordinary people in poor countries, the United Nations said yesterday.
In its annual World Investment Report, the UN Conference on Trade and Development (Unctad) said inflows of FDI rose 38% to $1.306 trillion, just short of the all-time high set in 2000 and the third annual rise in a row.
Unctad said the rise was due to the strong world economy and high prices for commodities, which boosted the activity of the oil, gas and mining sectors, many of which operate in areas such as Africa.
Khalil Hamdani of Unctad said a recent survey of investors showed that FDI was likely to grow further this year, surpassing the 2000 record, and in 2008. He admitted, however, that growing uncertainty over the world's economic prospects could dent that increase.
The United States maintained its position as the number one destination for FDI, followed by Britain and France. Developed countries as a whole saw FDI rise 45% to $857bn while developing countries recorded a 21% increase to $379bn.
A push by China into Africa helped double the FDI flows there between 2004 and 2006 to $18bn, but Africa's share of global FDI slid to 2.7% from 3.1% in 2005 and remained much lower than for south east Asia or Latin America.
Mr Hamdani noted that while Africa in principle should be benefiting from record commodity prices, many countries there were hampered by deals signed with mining and oil companies in recent years when commodity prices were low, leaving them with much less income than they should be getting.